Interest Rates Remain On Hold – but for how long?

Home owners and property investors received good news today, with the Reserve Bank of Australia deciding to keep interest rates on hold.

Of course this was not a surprise and rates have remained at 4.75% since November, and some economists are predicting the next rise won’t be until the third or fourth quarter of the year. However others are predicting rates could go up in the next month or so.

Su-Lin Ong from RBC Capital says a high Australian dollar and the impact of recent natural disasters on growth has bought home owners some respite. “The RBA needs more evidence.” She says. “It needs to be compelled to move. The RBA’s probably going to stay on the sidelines for the next little while.”

While there is no case for a raise in interest rates, there are signs that the domestic economy is beginning to recover some of the strength lost in the wake of the natural disasters in the beginning of the year.

Robert Rennie, Westpac chief currency strategist, says that a number of factors show signs of a stabilising economy and consumers returning to spending. They include a rise in the February retail sales hinting at recovery in the consumer economy, as well as a lift in motor vehicle sales.

I’ve spoken to a number of experts who are uncertain of when the next rate rise is coming, but Terry McCrann one expert I respect, suggests that interest rates could rise soon. Click here to find out more. Be prepared and budget accordingly.

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au

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